Coeur Mining, Inc. · NYSE:CDE
Coeur Mining — Q2 2016 Earnings Presentation
39 slides from Coeur Mining's earnings presentation, Jul 28, 2016
Slide 1: Second Quarter 2016 Financial Results
Second Quarter 2016 Financial Results Conference Call and Webcast July 28, 2016
Slide 2: Cautionary Statements
Cautionary Statements This presentation contains forward‐looking statements within the meaning of securities legislation in the United States and Canada, including statements regarding, anticipated production, costs, capital expenditures, cash flow, expenses, debt levels, the impact of the new gold
Slide 3: Continued Success in Companywide Repositioning
Continued Success in Companywide Repositioning Breakout second quarter results reflect solid execution of strategic plans Continued industry‐leading cost reductions despite lower FX benefit relative to peers Higher production at higher margins has led to positive earnings and positive free cas
Slide 4: Second Quarter and Recent Highlights
Second Quarter and Recent Highlights z Production of 9.6M silver equivalent ounces1, a 19% increase over 1Q 2016 z Adj. AISC of $13.27 per realized AgEqOz1, a 10% decrease year‐over‐year Adj. CAS of $10.05 per realized AgEqOz1, a 14% decrease, and Adj. CAS of $644 per realized AuEqOz1, a z 21% decre
Slide 5: Second Quarter 2016 Highlights (cont.)
Second Quarter 2016 Highlights (cont.) Adjusted EBITDA1 nearly doubled quarter‐over‐quarter; Earlier than expected positive earnings and free cash flow2 Quarter YOY in millions US$, except per ounce figures 2Q 2016 1Q 2016 2Q 2015 Variance Variance Silver ounces sold (millions) 4.0 3.5 13% 4.0 (1%)
Slide 6: Continued Industry-Leading Cost Reductions Driving Strong Financial Performance
Second Quarter 2016 Highlights (cont.) Continued Industry‐Leading Cost Reductions Driving Strong Financial Performance Quarter YOY 2Q 2016 1Q 2016 2Q 2015 Variance Variance Adjusted CAS per AgEqOz (realized)1 $10.05 $11.08 (9%) $11.75 (14%) Silver Mines Primary Adjusted CAS per AgEqOz1 $10.71 $12.05
Slide 7: Leader in Cost Reductions
Leader in Cost Reductions Adj. CAS / AgEqOz1 (Primary Silver Mines) Adj. CAS / AuEqOz1 (Gold Mines) $13.96 $14.13 $940 $899 $13.60 $13.68 $12.75 $12.05 $764 $11.87 $10.71 $721 $11.08 $644 $10.05 FY'13 FY'14 FY'15 1Q'16 2Q'16 FY'13 FY'14 FY'15 1Q'16 2Q'16 Companywide Adj. AISC / AgEqOz1 $20.34 $19.23
Slide 8: Significant Increase in Adj. EBITDA & Reduction in Gross Leverage
Significant Increase in Adj. EBITDA & Reduction in Gross Leverage LTM Adj. EBITDA1 Total Debt / LTM Adj. EBITDA1 $170.9 5.9x 5.7x $127.0 $135.8 $94.3 $98.6 3.9x 3.8x 3.0x 2.5x 2 06/30/15 09/30/15 12/31/15 03/31/16 06/30/16 6/30/15 9/30/15 12/31/2015 3/31/2016 6/30/2016 6/30/2016 Pro forma 6/30/16 $
Slide 9: Palmarejo: Rising Production Levels from High-Grade Underground
Palmarejo: Rising Production Levels from High‐Grade Underground Production and Cost Performance Cash Flow and Capital Expenditures $13.48 $13.21 $11.54 $11.40 $12.07 $12.04 $22.9 $9.02 $20.3 $ in millions $10.01 $10.18 $8.24 1,422 1,247 1,307 18,127 22,974 1,126 14,668 18,731 $11.3 14,326 933 $9.7 $
Slide 10: Palmarejo: Successful Transition to Lower-Tonnage, Higher-Grade
Palmarejo: Successful Transition to Lower‐Tonnage, Higher‐Grade Underground Mine Complete Tons Mined Average Recovery Rate 300 281 95.4% 258 247 92.1% 250 284 89.5% short tons (000s) 87.9% 200 216 89.1% 190 189 88.8% 150 173 86.4% 149 102 78.7% 84.7% 78.5% 100 50 35 76.2% 2 73.9% 0 1Q'15 2Q'15 3Q'15
Slide 11: Gold Stream Agreement to Unlock Value at Palmarejo
Gold Stream Agreement to Unlock Value at Palmarejo Principal Terms Satisfied the 400,000 ounce minimum delivery obligation under the original royalty agreement on July 26th Gold stream agreement entered into October 2014; new, more favorable terms to take effect in August Covers 50% of gold pr
Slide 12: Financial Statement Impacts of Franco-Nevada Agreements
Financial Statement Impacts of Franco‐Nevada Agreements Previous Royalty Agreement New Stream Agreement Income 100% of gold sales recorded at spot prices Gold sales to FNV recorded at $800/oz plus Statement Fair value adjustments recorded to reflect deferred revenue changing gold prices on min
Slide 13: Rochester: Higher Mining Rates Leading to Lower Unit Costs
Rochester: Higher Mining Rates Leading to Lower Unit Costs and Stronger Cash Flow Production and Cost Performance Cash Flow and Capital Expenditures $12.37 $12.61 $10.8 $12.01 $12.01 $11.30 $8.8 $9.2 $10.89 $11.19 $11.29 $10.94 $ in millions $10.43 $6.5 20000 1,294 16,411 ounces $5.9 1,197 1,107 13,
Slide 14: Kensington: Higher Grade Contributes to Strong Production at Lower Costs
Kensington: Higher Grade Contributes to Strong Production at Lower Costs Production and Cost Performance Cash Flow and Capital Expenditures $777 $13.7 $842 $12.0 $745 $761 $740 $9.5 $8.9 33,713 31,974 32,210 $8.1 $7.7 $7.5 $ in millions 29,845 28,799 ounces $5.5 $4.7 $4.5 2Q'15 3Q'15 4Q'15 1Q'16 2Q'
Slide 15: Wharf: Coeur's Lowest Cost Mine and Largest Contributor to FCF
Wharf: Coeur’s Lowest Cost Mine and Largest Contributor to FCF2 Production and Cost Performance Cash Flow and Capital Expenditures $970 $667 $556 $18.1 $ in millions $716 $16.2 $534 32,231 $12.9 ounces 28,433 23,427 $9.7 21,186 $8.2 16,794 $1.2 $1.2 $1.4 $1.5 $0.7 1 1 2Q'15 3Q'15 4Q'15 1Q'16 2Q'16 2
Slide 16: San Bartolomé: Local Ore Purchases Contributing to Improved Cash Flows
San Bartolomé: Local Ore Purchases Contributing to Improved Cash Flows and Lower Costs Production and Cost Performance Cash Flow and Capital Expenditures $14.41 $13.26 $12.97 $12.48 $12.56 $11.2 $10.0 $ in millions 1,495 1,550 1,458 1,382 1,178 ounces $5.4 $5.7 $5.5 $2.5 $1.8 $1.0 $1.3 $0.5 2Q'15 3Q
Slide 17: 2016 Guidance: Expect to Produce 34-37M AgEq oz
2016 Guidance1: Expect to Produce 34 – 37M AgEq oz Production Guidance Silver and silver 2015 Actual Results 2016 Guidance 1H 2016 Result equivalent ounces in thousands Silver Gold AgEq Silver Gold AgEq Silver Gold AgEq Palmarejo 5,149 70,922 9,404 3,875 – 4,400 67,000 – 72,000 7,895 – 8,720 2,240 3
Slide 18: 2016 Cost Guidance: Well On-Track Through June 30
2016 Cost Guidance1: Well On‐Track Through June 30 Cost Outlook in millions except per ounce costs 2015 Actual Result 2016 Guidance 1H 2016 Result Costs applicable to sales per silver equivalent ounce2 – Palmarejo $13.03 $12.50 ‐ $13.50 $10.44 Costs applicable to sales per silver equivalent ounce2 –
Slide 19: Appendix
Appendix
Slide 20: Non-GAAP to U.S. GAAP Reconciliation: Adjusted Net Income
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Adjusted Net Income (Loss) in thousands 2Q 2016 1Q 2016 2Q 2015 Net income (loss) $14,497 ($20,396) ($16,677) Fair value adjustments, net 3,579 8,695 (2,754) Impairment of equity securities 20 ‐‐ 31 Write‐downs ‐‐ 4,446 ‐‐ (Gain) loss of sale of asset
Slide 21: Non-GAAP to U.S. GAAP Reconciliation: Adjusted EBITDA
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Adjusted EBITDA in thousands 2Q 2016 1Q 2016 4Q 2015 3Q 2015 2Q 2015 Net income (loss) $14,497 ($20,396) ($303,000) ($14,219) ($16,677) Interest expense, net of capitalized interest 10,875 11,120 11,758 12,446 10,734 Income tax provision (benefit) (76
Slide 22: Non-GAAP to U.S. GAAP Reconciliation: LTM Adjusted EBITDA
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) LTM Adjusted EBITDA in thousands LTM 6/30/16 LTM 3/31/16 LTM 12/31/15 LTM 9/30/15 LTM 6/30/15 Net income (loss) ($323,118) ($354,291) ($367,182) ($1,143,223) ($1,125,538) Interest expense, net of capitalized interest 46,199 46,058 45,703 44,511 43,680
Slide 23: Non-GAAP to U.S. GAAP Reconciliation: Free Cash Flow
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Consolidated Free Cash Flow Reconciliation in thousands 2Q 2016 1Q 2016 4Q 2015 3Q 2015 2Q 2015 Cash flow from operating activities $45,939 $6,617 $44,414 $36,237 $36,863 Capital expenditures (23,288) (22,172) (30,035) (23,861) (23,677) Gold productio
Slide 24: Costs Applicable to Sales: Q2 2016
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Three months ended June 30, 2016 Silver Gold (dollars in thousands except per ounce costs) San Total Total Three months ended June 30, 2016 Palmarejo Rochester Endeavor Kensington Wharf Total Gold Bartolomé Silver Costs appli
Slide 25: Costs Applicable to Sales: Q1 2016
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Three months ended March 31, 2016 Silver Gold (dollars in thousands except per ounce costs) San Total Total Three months ended March 31, 2016 Palmarejo Rochester Endeavor Kensington Wharf Total Gold Bartolomé Silver Costs app
Slide 26: Costs Applicable to Sales: Year 2015
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Year ended December 31, 2015 Silver Gold (dollars in thousands except per ounce costs) San Total Year ended December 31, 2015 Palmarejo Rochester Endeavor Total Silver Kensington Wharf Total Gold Bartolomé Costs applicable to
Slide 27: Costs Applicable to Sales: Q4 2015
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Three months ended December 31, 2015 Silver Gold (dollars in thousands except per ounce costs) San Total Total Three months ended December 31, 2015 Palmarejo Rochester Endeavor Kensington Wharf Total Gold Bartolomé Silver Cos
Slide 28: Costs Applicable to Sales: Q3 2015
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Three months ended September 30, 2015 Silver Gold (dollars in thousands except per ounce costs) San Total Total Three months ended September 30, 2015 Palmarejo Rochester Endeavor Kensington Wharf Total Gold Bartolomé Silver C
Slide 29: Costs Applicable to Sales: Q2 2015
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Three months ended June 30, 2015 Silver Gold (dollars in thousands except per ounce costs) San Total Total Three months ended June 30, 2015 Palmarejo Rochester Endeavor Kensington Wharf Total Gold Bartolomé Silver Costs appli
Slide 30: Costs Applicable to Sales: Year 2014
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Full‐year ended December 31, 2014 Silver Gold (dollars in thousands except per ounce costs) San Total Full‐year ended December 31, 2014 Palmarejo Rochester Endeavor Total Kensington Bartolomé Costs applicable to sales, includ
Slide 31: Costs Applicable to Sales: Year 2013
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Year ended December 31, 2013 Silver Gold (dollars in thousands except per ounce costs) San Total Full‐year ended December 31, 2013 Palmarejo Rochester Endeavor Total Kensington Bartolomé Costs applicable to sales, including a
Slide 32: All-In Sustaining Costs
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) All‐In Sustaining Costs in thousands except per ounce costs 2Q 2016 1Q 2016 FY 2015 2Q 2015 FY 2014 FY 2013 Costs applicable to sales, including amortization (U.S. GAAP) $137,540 $128,469 $617,938 $156,828 $635,516 $691,696 Amortization 37,075 26,914
Slide 33: All-in Sustaining Costs per Silver Equivalent Ounce: 2016 Guidance
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) All‐in Sustaining Costs per Silver Equivalent Ounce Full‐Year 2016 Guidance (dollars in thousands except per ounce Silver Gold costs) San Total Full‐Year 2016 Guidance Palmarejo Rochester Endeavor Total Silver Kensington Wharf Total Gold Bartolomé Cos
Slide 34: Coeur's Mineral Reserves
Coeur’s Mineral Reserves Grade (oz/ton) Ounces (contained) Year‐end 2015 Location Short tons Silver Gold Silver Gold Proven Reserves Palmarejo Mexico 802,000 6.29 0.077 5,048,000 62,000 Rochester Nevada, USA 96,520,000 0.53 0.003 51,007,000 316,000 Kensington Alaska, USA 338,000 ‐ 0.20 ‐ 67,000 Whar
Slide 35: Coeur's Measured and Indicated Mineral Resources
Coeur’s Measured and Indicated Mineral Resources (Excluding Reserves) Grade (oz/ton) Ounces (contained) Year‐end 2015 Location Short tons Silver Gold Silver Gold Measured Resources Palmarejo Mexico 134,000 4.84 0.051 651,000 7,000 Rochester Nevada, USA 60,528,000 0.49 0.004 29,709,000 233,000 Kensin
Slide 36: Coeur's Inferred Mineral Resources
Coeur’s Inferred Mineral Resources Grade (oz/ton) Ounces (contained) Year‐end 2015 Location Short tons Silver Gold Silver Gold Inferred Resources Palmarejo Mexico 1,721,000 4.79 0.085 8,240,000 147,000 Rochester Nevada, USA 59,597,000 0.52 0.003 31,195,000 179,000 Kensington Alaska, USA 2,059,000 ‐
Slide 37: Executive Leadership
Executive Leadership Mitchell J. Krebs – President and Chief Executive Officer. During his twenty year tenure with Coeur, Mr. Krebs has led nearly $2 billion in capital raising and debt restructuring activities and has facilitated over $2 billion of acquisitions and divestitures. Mr. Krebs was previ
Slide 38: Board of Directors
Board of Directors Robert E. Mellor – Former Chairman, Chief Executive Officer and President of Building Materials Holding Corporation (distribution, manufacturing and sales of building materials and component products) from 1997 to January 2010, director from 1991 to January 2010; member of the boa
Slide 39: Contact Information
Contact Information Corporate Office: Coeur Mining, Inc. 104 S. Michigan Ave, Suite 900 Chicago, Illinois 60603 Main Tel: (312) 489‐5800 Stock Ticker: CDE: NYSE Warrant Ticker: CDM.WT: TSX Website: coeur.com Contact: Courtney Lynn Vice President, Investor Relations & Treasurer [email protected] Rebecc